Medicaid Managed Care Will Save Money – So Why Hasn’t it Happened?

May 21, 2020

Back in 2015, the North Carolina General Assembly enacted legislation to move the state run Medicaid program from a fee-for-service model to a managed care model. Managed care is a value-based model – something we’ve talked about before – that basically restructures the financial incentives to the healthcare industry to reward positive health outcomes rather than simply providing more care.

According to a study done in April of 2019, the savings could be enormous. Without this transformation, the costs over four years are expected to be $6.6 billion. When the program is implemented, the savings are expected immediately and would likely rise to over 11% by year four – that’s hundreds of millions in savings for our state.

According to NCDHHS, the program was meant to begin February of this year. So why hasn’t it? It was not due to COVID -19 but the Governor’s veto of the budget which contained the funding to launch the program